Being Too Efficient Kills Effectiveness

When More Is Not Better Cover

For many years I have said “Being too efficient kills effectiveness”.

The big issue for me is that I just get it. I am not always smart enough to explain it. In college when the Space Shuttle Columbia disaster occurred, I was an Air Force Security Policeman. I was also in college taking basic classes. From looking at the video, I wrote a paper explaining in layman’s terms what happened a full year before the “engineers” understood the problem. It is my gift and my curse that I can see this but can’t always explain it or why.

Today I finished Roger L Martin’s book When More is Not Better. 80% of the book explains my thought on why “Being too efficient kills effectiveness”. He explains that “slack” is necessary. I agree with that 100%.

One of the tenants of business school is that “If you can measure it, you can improve it”. Many business leaders try to separate and silo their business. There is a finance department, a sales department and maybe an operations department. If the finance department uses some variables to improve their numbers without considering other departments, the company as a whole can suffer.

A Trucking Company

Let’s use a trucking company as an example. A mid sized company with 40 trucks and 40 drivers. Fuel is a cost on the operational side. Payroll is a cost on the finance side. Driving slower saves fuel and makes the operations side look like it is saving money. Since the drivers are hourly, the slower speeds increase the payroll making the finance company suffer. It is the CEO’s job to figure out what speed maximizes the benefits for both departments.

While this is an over simplified example, in larger companies this happens regularly. It is why consulting companies can charge a small fortune. Simply combining a few variables across departments can lead to even better results. But what happens if fuel get cheap, and the super consultants say drive so fast the drivers become dangerous? Again there is a limit to how efficient the truckers can be before they become ineffective. What if gas prices get so high that it is better for the drivers to go half speed and the deliveries are delayed. While the fees might be the lowest in the business, the customers will start looking elsewhere for a better combination of speed and cost. The customers variables never even hit the trucking companies analysis.

His Canadian Shines Through

While I agree with 90% of the book, he uses a couple of examples that exactly prove my point. No one disagrees with MADD. None of us want to lose a child at the hands of another, especially a drunk driver. the problem is he never discusses the cause and effect. Banning drive through alcohol sales and open containers increased drunk driving accidents and deaths in some areas. The reality is a worker would drive through and drink one big beer on the way home when it was legal. The effects would kick in about the time he was home. Under the new rules they would stop in a bar, drink three, start to feel the effects and start driving home while they became more impaired over the next 30-45 minutes. Unintended consequences to be sure but very real.

Mr. Martin also used the book as a personal jab at the second amendment. The simple truth is that guns don’t kill anyone by themselves any more than a car kills people. Someone must pull the trigger. Like driving a car, requiring a safety class before allowing firearms purchases wouldn’t be unreasonable. In fact the NRA has a free safety program for kids and schools. Sadly most schools won’t even consider the Eddie Eagle program because of basic emotional fear.

Campaign Reform

If you think that there might be a way to return the United States to a better state of democracy, Mr. Martins book is a good start. His agenda’s for business leaders, politicians and educators is a great start. One thing we need here badly is campaign reform. My opinion? If you win or lose. All the leftover money isn’t yours. 25% goes to your parties fight chest. 75% goes to pay down the national debt and isn’t tax deductible for the donors. Creating a “foundation” and paying yourself as the CEO or buying private jets is absolute horse poop. We the people need to say “No” and fix the problem.

The Tax Problem

Another major point where Mr. Martin and I are close but not quite in agreement is income tax. The 14th is that he thinks that taxes need to go back to WWII era levels. What he overlooks is the fact that there were no “payroll taxes” like medicare, social security or unemployment. The tax burden is still there it just shifted.

Increasing taxes on income over $1 Million per year, and a significant increase on income over $10 Million per year isn’t what I disagree with. Because there are so many new taxes and costs for putting people to work, that is why the Reagan Trickle Down failed. The rich will spend money if it helps them avoid taxes. The real question to ask is “What do we want?” People need work, there is no question. If taxes go up, incentives to spend money hiring people should go up as well. If not the only one hiring is the government.

The Increase in Government Bloat

The Government would love nothing more than to increase it’s income (tax collections) and hire more people. That is how universities justify bigger salaries for the people at the top. The ratio of administrators to students at California Universities has skyrocketed since the 1960’s. Why do we need so many “administrators”? Why aren’t more educators added instead so more students have an opportunity to go to college?

The government works the same way. The job of the people is to regulate that bloat with their vote. Until then, I recommend reading “When More is Not Better”.